Cease-fire fails to prompt big spending spree WAR IN THE GULF

March 17, 1991|By Phil Roosevelt | Phil Roosevelt,American Banker

NEW YORK -- The quick end to the ground war in the Middl East appears to have given a slight boost to consumer confidence but hasn't sparked a spending spree. A spot check of credit card, auto and mortgage lenders indicates only an uptick in activity in the two weeks since the cease-fire.

Real estate brokers, auto dealers and retailers are optimistic and say customer traffic is up. But increases in sales are generally modest, with homes sales showing the most strength.

Meanwhile, data released this week showed that retail sales rose 0.8 percent in February, with auto sales up 3.3 percent from their extremely depressed level in January.

First Atlanta Corp., which has a $1.2 billion credit card portfolio, said card sales volume has risen slightly, about 3 percent from Feb. 11 through March 11.

The brightest news now comes from mortgage lenders, who were clobbered last year by the gulf crisis, the recession and the housing slump.

Lenders across the country say demand is up sharply from the end of last year, not only for home purchases but for refinancings of existing mortgages. Low interest rates, attractive prices and the approach of the spring buying season are finally luring

people into the market.

"People were waiting to see what happened in the gulf," said Steven Stampone of Century 21 in Philadelphia. "Once it was over, something was lifted from their shoulders, and they decided to make a move."